MUMBAI: Petronas Lubricants International (PLI) has set up a lubricant blending plant at Patalganga on the city's outskirts at an investment of $50 million.

The facility, constructed on 25 acres with an estimated production output of 110 million litres of lubricants, is expected to commence operations by end-2017, a company statement said.

The $50-million plant is an essential driver that will help propel PLI's position as a formidable lubricant player in the country, it said.

Since its inception in 2006, PLI has recorded steady volume growth at 40 per cent CAGR. In India, the expanding economy and emerging middle class will continue to contribute to the robust growth in automotive market, it said.

With a market size of 2.5 billion litres and lubricant demand projected to grow at 2.3 per cent CAGR, India is the world's 3rd largest lubricant market behind the US and China.

About the company's plans in India, PLI regional head of Asia Giuseppe Pedretti said, "we have embarked on a solid growth plan to accelerate our business here, starting with investments into a new plant that is equipped with world-class lubricants blending facilities and equipment, highly automated production line, and increased storage tanks."

"We have also embarked on a new route-to-market approach that will see us transform the way we do business with our distributors and retailers," he added.

In fact, segment leaders like Maruti Suzuki, Tata Motors and Hero MotoCorp have reported de-growth of 34.3 per cent, 45 per cent and 20 per cent, respectively giving a clear indication of a prolonged slowdown in the sector.